All Types of Assistance (TOA)

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1 BEM of 6 DEPARTMENT POLICY All Types of Assistance (TOA) This item describes income types that are entered in the Bridges rental/room and board logical unit of work (LUW). Some types of rental/room and board income are counted as unearned income and some as earned income or self-employment. To create a new income record, go to the income questions screen and answer yes to the rental/room and board question. This will add the rental/room and board logical unit of work (LUW) to the driver flow and cause Bridges to consider this income. To view or change an existing income record, select the appropriate income-related LUW from the left navigation. Enter the gross income amounts and details. Data entered in a LUW is not saved until all screens in the LUW are completed and saved. Use the tabs across the top of the Bridges screens to identify which screens are contained within the LUW. Income data is not considered in the eligibility result until Eligibility Determination/Benefit Calculation (EDBC) is run. Bridges will determine both of the following: Countable income (allowing expenses when appropriate). If the income is counted as unearned, earned or selfemployment. Income data does not affect benefit issuance until the eligibility results are certified for a program. RENTAL INCOME Rental income is money an individual (landlord) receives for allowing another individual (renter) to use the landlord's property. It includes income from a lease.

2 BEM of 6 Farm Land Rental Farm land rental means renting land to someone for the purpose of producing farm products. Bridges counts the gross rent payment minus allowable expenses as unearned income. Bridges allows the higher of the following: 10% of the rental payment. The landlord's actual expenses if the landlord chooses to claim and verify the expenses. See BEM 502, SELF-EMPLOYMENT EXPENSES, for the types of actual expenses that can be allowed. In-Home Rental In-home rental is when a landlord rents out part of his own dwelling to another individual. See Other Rental Income below when a landlord rents out a separate apartment in his dwelling or a separate building. Bridges counts the gross rent payment minus expenses as earned income from self-employment. Bridges allows the higher of the following: 60% of the rental payment. Actual rental expenses if the landlord chooses to claim and verify the expenses. Expenses must be both of the following: Clearly expenses of the rental unit (for example expenses the landlord would not have if not renting out part of his dwelling). Included in the list of allowable rental expenses below. Room and Board Room and board income is money an individual receives for providing another individual both food and a place to live. Allowable expenses of producing room and board (or board only) income are the higher of:

3 BEM of 6 25% of the income. Actual expenses if reported and verified. The maximum monthly FAP benefit for the number of boarders. Note: Allowable expenses are limited to the allowable expenses of producing self-employment income. See BEM 502, SELF- EMPLOYMENT EXPENSES. Other Rental Income Other rental income means any rental income that is not: Farm land rental. In-home rental. Room and board. Example: Individual rents his non-homestead house to another individual. Bridges determines whether to treat the rent as earned or unearned income based on the time the landlord actively engages in managing the rental property: Under 20 hours per week- unearned income. 20 or more hours per week- earned income. Active management includes, but is not limited to, the following: Advertising. Showings to prospective renters. Accounting activities. Inspections. Cleaning, repairing, and redecorating. Accept the landlord's statement of the time spent actively managing the rental property unless the estimate is questionable. If necessary, verify the time estimate by contacting individuals who would be reasonably expected to know (example: the renter concerning inspections and repairs). Bridges counts the gross rent payment minus allowable expenses as income. Bridges allows expenses that are the higher of: 65% of the rental payment. Actual rental expenses if the landlord chooses to report and verify the expenses. See Allowable Rental Expenses below.

4 BEM of 6 ALLOWABLE RENTAL EXPENSES Bridges uses the standard percentage for expenses if either of the following: The landlord chooses not to report actual expenses. The landlord does not verify reported expenses exceeding the standard percentage. When a landlord chooses to report actual expenses for in-home rental or other rental income, Bridges uses the following to determine what expenses are allowable and should be entered in Bridges. Expenses must be the landlord's obligation and must solely be expenses of the rental property to be allowed. Allowable expenses may include: Real estate insurance. Repairs. Heat. Utilities. Property taxes. Lawn care. Snow removal. Furniture. Advertising for renters. Interest and escrow portions of mortgage or land contract payment. Bridges will not deduct expenses exceeding the gross rental income (a loss) from other types of income. VERIFICATION REQUIREMENTS except Healthy Kids Verify countable income at all of the following: Application, including a program add, prior to authorizing benefits. At member add, only the income of the member being added.

5 BEM of 6 Redetermination. When program policy requires a change be budgeted. Exception: For FIP, RAP, SDA, CDC and FAP accept the client s statement for starting and increasing income. Select starting or increasing income as the verification source. Selecting client statement as the verification source will result in Bridges incorrectly pending eligibility and generating a Verification Checklist. Verify stopping and decreasing income, or when the income change information is unclear, inconsistent or questionable. Exception: For MA. accept the client s statement regarding changes in income for ongoing EDG s unless you are completing a redetermination. The client has primary responsibility for obtaining verification. Do not deny assistance because a boarder or other source refuses to verify income. Assist the client in obtaining verification if requested. See BAM 130, VERIFICATION AND COLLATERAL CONTACTS and BEM 702, CDC VERIFICATIONS. Healthy Kids Only Income and expenses are not verified for Healthy Kids. Client statement is an acceptable verification source for income and expenses. VERIFICATION SOURCES Property Expenses Rental and Roomand-Board Income Mortgage or land contract. Bills or receipts. Written statement from the boarder/roomer. Accounting or other business records. Lease or contract. Rent receipt book.

6 BEM of 6 Rental/Room and Board Expenses LEGAL BASE FIP Receipts MCL et. seq. SDA Annual Appropriations Act Michigan Administrative Code; R CDC Child Care and Development Block Grant of 1990 Social Security Act, as amended 45 CFR Parts 98 and 99 R MA Social Security Act Sections 1902(a)(10), CFR 435, Subparts H and I MCL FAP JOINT POLICY DEVELOPMENT 7 CFR Child Care and Development Block Grand of 1990, P. L , Section 5105(a)(3) P. L Medicaid, Transitional Medical Assistance (TMA), and Maternity Outpatient Medical Services (MOMS) policy has been developed jointly by the Department of Community Health (DCH) and the Department of Human Services (DHS).